Banks without Parachutes – Competitive Effects of Government Bail-out Policies

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Subfields: Finance

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Did TARP Banks Get Competitive Advantages? (2015, unknown): “(Holmstrom and Tirole (1997), Boot and Marinc (2008), Allen, Carletti, and Marquez (2011), Mehran and Thakor (2012), Berger and Bouwman (2013)).”
How Does Capital Affect Bank Performance During Financial Crises (2013, unknown): “…in Section 2, deposit insurance associated with core deposits could cause additional risk taking due to an enhanced moral hazard incentive (e.g., Carletti, 2008; Gropp, Gruendl, and Guettler, 2010) and due to increased competition for deposits (Matutes and Vives, 1996; Hakenes and Schnabel, 2010).”
Bank size and risk-taking under Basel II (2005, background): “Most importantly, the merged banks may become “too big to fail,” which would raise new incentive problems (see Hakenes and Schnabel (2004) for a recent theoretical treatment). Moreover, mergers may reduce competition. So far, empirical work on the U. S. has not been able to find any indications that”
Did Saving Wall Street Really Save Main Street? The Real Effects of TARP on Local Economic Conditions (2015, unknown): “Finally, bailouts may result in changes in the behavior by the competitors to TARP banks that may partially offset or accentuate the increase or decrease in credit supply by the TARP banks (Hakenes and Schnabel, 2010; Gropp, Hakenes, and Schnabel, 2011; Koetter and Noth, 2014).”